The Impact of Globalisation on the Australian Economy Essay

The Impact of Globalisation on the Australian Economy Globalisation refers to the process of increased integration between different countries, (too many ‘and’) economies and the increased impact of international influences on all aspects of life and economic activity. ( u need a better definition of globalization. ) Globalisation The process of globalization involves growing economic integration and interdependence among nations. This can be reflected in increasing actual movement across nations of Trade, Investment, Technology, Finance and Labour.

Globalisation has enable easy access and the capacity to move across nations. Globalisation and Technology Despite repeated reference to Australia being an ‘old economy’, there is considerable evidence to support Australian growing acceptance of technology and globalised communication and trade. ( need to rephrase this sentence- not making sense) A recent OECD publication rated Australia highly amongst the 27 OECD nations for its involvement in the information and communications technology sector (ICT). Australia was ranked: ??? stats needed here) The Australian Bureau of Statistics also reports a growing acceptance of online shopping amongst Australian consumers. More than 1. 3 million Australian adults purchased or ordered goods and services for their own private use over the internet. (You need to relate it to globalization of technology and how we are integrated throught techno) Globalisation and the Labour Market The international movement of labour has been growing since the 1960s. Around 2. 3% of the world population lives outside their country of birth and 1. % of the world’s workforce works in countries other than those of its citizenship. This trend is on the increase with the World Wide Web opening the door for skilled individuals to apply for positions in almost any country in the world. Newspapers, such as the Australian or Sydney Morning Herald, offer Australian school teachers jobs in places such as China, England, Canada and the USA at wage levels, often, more than double, that which they currently receive. Highly skilled labour is being drawn from Australia by the high salaries being offered overseas.

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This brain drain will accelerate as the global economy expands. (excellent point but what about the low skilled workers and the increase demand for them in developing or New Industrialised Countries where these low skilled workers undertake undesirable work) The second component of globalisation involves the potential impact of changes in the global market on economies. This means businesses consider the potential entry of international competitors into their markets. Businesses plan pricing strategies and employment policies based on what could happen if cheap foreign producers entered the market.

It also means businesses consider, or threaten to set up, their operations in countries where profits are expected to be greatest, eg low wage countries, where unions are suppressed and there are low corporate tax rates. Governments and employers use these fears to push for labour market and workplace reforms. This has occurred in Australia with the move to individual contracts and the growing casualisation of the workforce. While some highly skilled workers may benefit from this, the lowly skilled and marginalised workers tend to lose out through poorer working conditions and less job security.

The Implications of Globalisation for Economic Policy Makers in Australia The Australian Governments in recent decades have been moving Australia more into the international market place. There has been in Australia ongoing structural reform over the past two decades: including sustained tariff reform; financial market reform; reform of the operation of government business enterprises; enhancing national competition policy; changes in foreign investment rules; tax reform; labour market reform; reform of corporate governance arrangements and others.

The effectiveness of Reserve Bank intervention in the foreign exchange market is becoming less and less as financial markets expand. While the Reserve Bank can probably be quite effective at pushing the Australian dollar down by selling the currency, it is very limited in pushing it up as the RBA only has its limited foreign reserves to buy the Australian dollar. The financial traders and dealers seek a low inflation, low interest rate, low current account deficit, high growth, budget surpluses and small public sector.

If the Government does not achieve these policies, the markets will punish it. (What do u mean? ) If they do achieve them, the markets may still punish them. Any way you look at it, Australia is integrated into the globalised world economy and is dependent on the activities and policies of globalisation. (If this is a cut and paste from a secondary source plz avoid this)

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